What is skills-based hiring in theory and practice?
Let’s take a closer look at what exactly we mean by abilities-based hiring and what this may look like in practice.
Definition
Skills-based hiring is a modern recruitment strategy that evaluates candidates based on their specific skills and competencies. Unlike traditional hiring methods that emphasise educational qualifications and previous job titles, this approach prioritises a candidate’s abilities that are directly relevant to the job.
Real-life example
An example of competency-based hiring might be a tech company looking to hire a software developer. Traditionally, the recruiter might have looked for candidates with a computer science degree from a reputable university and a certain number of years of experience in the industry under their belt. However, this approach might limit the pool of applicants to those who fit a specific educational and experiential mould.
With a skills-focused recruitment approach, the employer instead focuses on the specific skills required for the job, such as proficiency in certain programming languages (like Python or JavaScript), experience with software development frameworks or the ability to solve complex real-life coding problems. Instead of filtering candidates based on degrees or job titles, they may assess candidates through coding challenges, portfolio reviews or practical candidate skills tests that demonstrate their actual abilities.
In this way, the company might discover an exceptional candidate who, despite not having a traditional computer science degree or extensive industry experience, has developed excellent coding skills through self-study, workshops or personal projects. This candidate is then hired based on their proven ability to perform the job effectively.
Related: 11 ways to improve your talent sourcing
What are the benefits of skills-based hiring?
Before changing your recruitment process, it’s only natural that you will want to know what exactly is in it for you and for your staff. Here are the key benefits of skills-based hiring.
Less bias
Traditional hiring methods can be influenced by unconscious biases related to education, experience and demographics. Skills-oriented hiring reduces these biases by concentrating on the candidates’ actual abilities. For employers, this means fairer hiring practices and a more equitable workforce.
Improved job performance
When employees are hired based on their ability to perform specific tasks, they are more likely to succeed in their roles. This approach ensures that new hires have the skills needed to contribute to your team from day one, perform better in their role and be more productive.
Increased employee retention
Employers will be pleased to know that ability-focused recruitment can lead to higher job satisfaction and retention rates. When employees are well-matched to their roles, they tend to feel more valued and satisfied with their jobs. This, in turn, reduces staff turnover and the associated costs for organisations, creating a win-win situation.
More diversity
Finally, skills-based hiring gives you access to a more diverse talent pool. By focusing on skills rather than educational background or job history, employers can attract candidates from various backgrounds, including those with more unconventional career paths. The result may be a more progressive and inclusive workplace.
Related: Broaden your hiring horizons: prioritise potential and skills
What are the drawbacks of skills-based hiring?
Despite the many advantages of skills-based hiring, there are also some potential drawbacks to keep in mind.
Possible lack of cultural fit
When focusing only on skills, other key aspects, like ensuring that the new hire fits in well with the company culture, may be neglected. This can lead to issues such as a lack of unity in the team and lower employee morale. A lack of cultural fit can also result in misunderstandings and conflict within the team, as the new hire may not share the same values or communication styles as their colleagues. Over time, this misalignment may hinder collaboration and productivity, which is something employers want to prevent.
Forgetting soft skills
While it is important to hire someone with the technical skills you need, remember to keep an eye on an applicant’s soft skills too. For instance, if a candidate is highly proficient in computer programming, but lacks essential soft skills like communication and teamwork, they might not be the ideal choice. The best hire is someone who can bring both to the table.
Neglecting benefits of theoretical education
Having the right practical skills is indispensable for performing a role successfully. However, when completing a university or TAFE course, individuals learn a lot more than just hands-on skills. Applicants with a traditional educational background may have more knowledge of the theoretical underpinnings of their role, legal requirements and standards and broader context of their work. This may benefit both their own work and your company as a whole.
How can skills-based hiring be implemented in practice?
If your recruitment process is still more traditional, implementing a skills-based hiring approach requires a strategic shift in how you evaluate and select candidates. Here are some key steps to help you transition to this new recruitment strategy.
Identify key skills
The first step in implementing a skills-oriented hiring strategy is to identify the key skills required for each role. This involves analysing the job and understanding the necessary skills to successfully perform the role. Consider both technical skills and soft skills, such as communication and problem-solving abilities.
Adjust job descriptions
Once you have identified the key skills, update your job descriptions to reflect these requirements. Be specific about the skills needed, and avoid vague terms like ‘years of experience’ or ‘postgraduate degree required’. Instead, describe the specific abilities and competencies necessary for each role to improve your job ad and attract suitable candidates.
Search proactively
You can also filter potential candidates by the specific skills you are looking for when using Indeed Smart Sourcing, for example. In fact, directly searching for the roles and skills you need is a more proactive approach to hiring that is becoming increasingly popular among employers.
Use skill assessments
Incorporate pre-employment skill assessments into your hiring process to objectively evaluate candidates’ abilities. These assessments can include practical tests, work samples or simulations that reflect real job tasks. Online tools can help you streamline this process and give you reliable results.
Train hiring managers
Training hiring managers on the principles and benefits of abilities-focused recruitment is essential. This includes educating them on how to evaluate skills effectively and how to conduct interviews that focus on assessing candidates’ competencies. Providing ongoing support and resources to your recruiters helps ensure successful implementation of the skills-based hiring approach.
Related: The Recruiting Process for Employers: 15 Steps to Your Next Hire
What else ensures successful skills-based hiring?
Here are a few more things to keep in mind when considering adopting a skills-based hiring approach.
Ensure fairness
While skills focused hiring helps to reduce bias, it is important to ensure that the process remains fair and inclusive throughout. This includes using standardised assessments and being mindful of potential biases in the evaluation criteria. Regularly reviewing and updating your hiring practices can also help your company promote fairness when selecting new staff.
Maintain flexibility
Importantly, competency-based hiring needs to be flexible to adapt to changing job requirements. Regularly review the skills needed for each role and adjust your hiring criteria accordingly. This helps ensure that your hiring process stays relevant and effective at all times.
Continuously evaluate
Finally, it is important to continuously assess and, if necessary, improve the effectiveness of skills oriented hiring. Seek out feedback from your hiring managers and candidates, and track the performance and retention rates of your new hires. You can then use this data to refine your hiring practices to ensure that they are delivering the desired outcomes.
Skills-based hiring is a modern approach that can make a positive difference in your talent acquisition process. By focusing on the specific skills and competencies of candidates, you can create a more diverse, fair and effective hiring process for your company. This approach improves job performance and employee retention while ensuring your organisation has the most suitable talent for your needs, providing a significant competitive advantage in today’s job market.
